Stage 2 Nature Positive Reforms introduced to Parliament

The Stage 2 amendments of the Nature Positive Laws have been introduced to the House of Representatives.

Government recently announced a staged process to amend Australia’s environmental laws which has resulted in the proposal to establish Environment Protection Australia and Environment Information Australia ahead of fundamental reforms to environmental laws around approvals processes, offsets, climate-related reforms, regional planning and national environmental standards.  These “Stage 3” issues are proposed to be the subject of further consultation, with the Minister indicating a comprehensive exposure draft will be released for public comment prior to introduction to Parliament.

The proposed Stage 2 amendments:

• Are contained within 3 separate bills:
  • Nature Positive (Environment Protection Australia) Bill 2024 (EPA Bill)
  • Nature Positive (Environment Information Australia) Bill 2024 (EIA Bill)
  • Nature Positive (Environment Law Amendments and Transitional Provisions) Bill 2024 (EPBC Act Amendments Bill)
• Establish Environment Protection Australia (EPA), Environment Information Australia (EIA) and make transitional and consequential amendments to the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).  Those amendments include moving assessment, approval and compliance functions to EPA, requiring reasons for information requests and bolstering penalties and compliance tools including environmental protection orders and auditing.
• Financial penalties have been significantly increased, including penalties for some offences being tied to the annual turnover of a body corporate and its related bodies corporate, capped at 2.5 million penalty units ($782.5m).

In introducing the Bill, the Federal Environment Minister has stated that she will ask the new EPA to examine illegal land clearing and offset conditions as a priority.

Environment Protection Australia

Central to the Stage 2 reforms is the creation of Environment Protection Australia (EPA), a national, independent environmental protection agency with significant regulatory powers and increased penalties compared to the current regime.  The recent Federal budget allocation $121m to establish the EPA.  The intention is that the EPA would initially operate within the Department and become an independent statutory authority from 1 July 2025.

The EPA will be headed by a Chief Executive Officer (CEO), who will be an independent statutory appointee. The CEO’s functions are extensive and cover a range of environmental laws, including the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The CEO, assisted by the EPA, will undertake regulatory activities such as issuing permits and licences, conducting compliance and enforcement activities, and making decisions on development proposals. The CEO will be appointed by the Governor General and can only be removed from office by the Governor-General on grounds including incapacity, absence or bankruptcy.

The Minister can give a statement of expectations setting out the Minister’s expectations for the CEO and the EPA, but owing to the independence of the EPA, the Minister cannot direct the CEO or the EPA in its performance or exercise of its functions or powers.

The role of the EPA is established through the proposed amendments to the EPBC Act, including amendments for delegation of the powers and functions of the Minister and Secretary, and increased penalties and compliance tools.

Environment Information Australia

The EIA Bill provides for the collection, management, and dissemination of high-quality environmental information. The Head of Environment Information Australia (HEIA) will operate independently within the Department of Climate Change, Energy, the Environment, and Water.

The HEIA's responsibilities include:

1. Providing Access to Environmental Information: The HEIA will offer the Minister, the CEO of the EPA, and the public access to environmental data and information.
2. State of the Environment Reports: The HEIA is tasked with preparing and publishing biennial State of the Environment reports, with the current function for those reports to be removed from the EPBC Act.
3. Environmental Economic Accounts: HEIA will be responsible for the environmental economic accounts which will integrate environmental data with economic indicators, offering a holistic view of the relationship between the economy and the environment.
4. National Environmental Information Assets: HEIA would be able to declare national environmental information assets, ensuring that critical data sets are recognised, maintained, and made accessible for various stakeholders.

Importantly, the HEIA will be tasked with setting the baseline for the definition of “nature positive” by no later than 31 December 2025.  This is the baseline from which the progress towards nature positive will be measured.

EPBC Act Amendments

The EPBC Act Amendments Bill proposes to amend the EPBC Act, among others, to support the establishment of the EPA and EIA.  Amendments for compliance and penalties will commence on assent, and are not linked to the establishment of the EPA.

The key proposed amendments include:

• Penalties: A significant increase to penalties for contraventions of the EPBC Act (including breach of conditions). The maximum penalty for companies found to have contravened the EPBC Act may be the higher of:
  • 50,000 penalty units – currently $15.65 million
  • Three times the benefit obtained and the detriment avoided; or
  • 10% of annual turnover of the company and its related bodies corporate in the 12 months leading to the contravention, capped at 2.5 million penalty units – currently $782.5 million.
• Information requests and stop the clock:  Reasons must be given if further information is required, and proponents would have the ability to keep the clock running where information requests are made.
• Environmental audit and compliance audits: New powers for the Minister to direct an environmental or compliance audit. The Minister may direct an environmental audit if the Minister suspects that a person has contravened or is likely to contravene a condition of an environmental authority or an environmental order under the EPBC Act, or the impacts are significantly greater than what was indicated when the authority was granted. Compliance audits may examine (among other things) whether activities purportedly covered by an environmental authority are, in fact, covered by the authority and whether the activities are being carried out in accordance with the conditions of the authority. Penalties apply to non-compliance with an audit direction. From 1 July 2025, this function would transfer to the CEO EPA.
• Environment Protection Orders: The amendments would introduce the ability for the Minister to issue an environment protection order (EPO) requiring a person to discontinue or not commence certain activities, change the manner in which the person is carrying out specified activities, or otherwise restricting the manner in which activities are carried on or requiring them to take a specified action. It is an offence not to comply with an EPO. From 1 July 2025, this function would transfer to the CEO EPA. EPOs cannot be reviewed on the merits, and natural justice is expressly excluded.

The transitional bill also:

• Transfers various functions from the Minister and/or DCCEEW to the CEO and the EPA. These changes are scheduled to commence from 1 July next year;
• allows the Commonwealth Environment Minister and the Secretary [of DCCEEW] to delegate the Minister’s functions and powers under the EPBC Act to the CEO or a senior EPA staffer;
• facilitates the transfer of documents and records from DCCEEW to the EPA; and
• allows transitional rules to be made by legislative amendment so that unforeseen administrative issues relating to the implementation of the Stage 2 Nature Positive Reforms may be dealt with quickly (although there are limitations on what the rules may cover).

What’s next?

The first three nature positive bills have been introduced to the House of Representatives and are expected to progress through the parliamentary process in the coming months.  In addition, additional funding has been allocated to the Department to facilitate more timely processing of existing applications.

The government has indicated that it will continue consultation on stage 3 of the Nature Positive Reforms, which would change the way assessments and approvals are processed and assessed under Commonwealth environment legislation, introduce national environmental standards, provide for regional planning, overhaul the environmental offsets framework in favour of more closely regulated ‘restoration actions’ and ‘restoration contributions’, and enhance First Nations engagement in environmental decision-making.

We expect there to be significant discussion and debate over the coming months about both the Stage 2 and Stage 3 reforms, including the role of climate considerations in the nature positive legislation.

________________________ 

Written by Kathryn Pacey, Melanie Debenham, Heidi Asten, Peter Briggs and Jasmine Wood.